On November 19, The Wall Street Transcript interviewed Thompson Jewell, Chief Executive Officer of Austral Pacific Energy Ltd. (AEN). Key excerpts follow:
TWST: What is Austral Pacific Energy?
Mr. Jewell: Austral Pacific Energy is actually registered in Canada, with head offices in Wellington, New Zealand, and field activities being oil production and oil and gas condensate exploration in the Taranaki Basin of New Zealand and the Foreland Basin in Papua New Guinea. We are currently producing oil through our Cheal facility; in fact today's rate is about 400 barrels a day. We have four wells. When they are fully on stream, we will tie them into a plant we have recently built and commissioned. At that time we anticipate that the wells will be producing between 800 to 1,000 barrels a day. The immediate plans are to drill additional new wells into the Cheal field and bring those production rates up as well as expand the Cheal field to the north where we operate additional acreage. The next step in our company development is to develop the Cardiff and Kahili natural gas condensate fields. This entails bringing them through an appraisal phase and into development over the next two to three years.
TWST: What is the agenda over the next six to 12 months? What are the key milestones or events? What would make that time frame a success?
Mr. Jewell: Our targets over the next six months are to get Cheal oil field wells drilled and increase our cash flow. Current plans call for field development wells to increase production and cash flow and two additional step-out wells to increase reserves. That's a really important milestone for Cheal. We expect to see a well drilled in the Kahili Field. This is important because it already has infrastructure in place that allows us immediate production and sales. We have immediate access to production facilities and market. The liquids that come out of that stream will be blended with the Cheal oil that we are producing and sold at world oil rates. I would expect to see Kahili come forward. I would expect to see the Cheal wells and an increase in production and an increase in reserves.
TWST: What are the key metrics that investors should focus on as they track your performance? What should matter to an investor? What matters to you?
Mr. Jewell: What matters to us is dominated by cash flow. We need to see cash flow; we need to see performance out of the wells that we drill. We need to see performance out of the wells that we are about to drill and show some track record in terms of a production profile and the associated cash flow with that. I would expect to see significant reserves growth on a longer-term basis. On a six-month measurement cycle we would expect to see cash flow, production and reserves growth.
TWST: What today compels investors to include Austral Pacific Energy as part of their current portfolios and longer-term investment strategies?
Mr. Jewell: Austral has it all right now. We are in a very advantageous position. We are just moving into the production phase, and we are seeing cash flow increase significantly. I think we can demonstrate growth in the organization. We are well positioned for the medium-term future in terms of our condensate opportunities, which will be going forward. We are also well positioned for the longer-term future with projects like the Papua New Guinea and likely offshore New Zealand. We have an excellent team in place to make this all happen, so it really comes down to managing projects effectively. We have the management team and the technical team in place to grow this company.